Where’s the 5-minute tax form?

posted at 12:55 pm on April 15, 2011 by Ed Morrissey

John Merline makes the jump from AOL to Investors Business Daily with this look at a campaign promise from Barack Obama that has gone not only unfulfilled but unacknowledged. On Tax Day, Obama promised during the campaign, taxpayers would soon be able to do their own taxes in just five minutes with a simplified form. More than two years later, following a Congress which his own party entirely controlled, not only has that not come to pass, but Obama hasn’t even attempted to fulfill that pledge:

When Barack Obama was running for president, he promised voters a simpler tax code. “When I’m president,” he said, “we’ll put in place a system where 40 million Americans . .. can do their taxes in less than five minutes.”

But President Obama hasn’t made good on that promise. Not only is there no five-minute tax form, but since he took office the byzantine tax code has grown increasingly complex. This year, it will take the average taxpayer 23 hours just to fill out form 1040 — up from 21 hours last year, according to the IRS. It now takes seven hours to fill out the so-called 1040 EZ.

Only in Washington could someone name a form that takes seven hours to complete the “EZ” version.

It’s not as if Obama hasn’t had opportunities to pursue tax reform, either. He had the entirety of the 111th Session of Congress, with its large Democratic majorities, to pass a simplification of the tax code. Not only would such an effort breezed through Congress, Obama would likely have picked up significant Republican support, making his claims of post-partisanship much more credible. Taxpayers would have loved it, and Democrats would likely have at least held control of the House in the midterms, or perhaps even expanded their majorities. The Tea Party might not have caught the imagination of grassroots activists.

Instead, Obama chose to pursue ObamaCare, and his electoral disaster soon followed. Even late in the game, though, after ObamaCare passed, Obama had a perfect opening to return to the tax code issue, as Merline points out:

A year ago, he promised to “make it easier, quicker and less expensive for you to file a return” and ordered his Economic Recovery Advisory Board to find ways to simplify the code. …

But Obama hasn’t done much more than talk about the issue. The advisory board report went nowhere, and the president hasn’t pushed his five-minute tax idea since taking office.

Just as with the deficit commission, Obama called the panel into being and then ignored its recommendations. They existed for one purpose — to provide political cover for Obama’s efforts on reform. Why set the expectation by creating the panels just to waste the opportunity to get something accomplished? That’s especially true when it comes to an effort that most people would welcome with open arms.

Instead of talking simplification, Obama talks about eliminating deductions, a notion that’s highly unpopular. Whatever political magic and skill Obama might have once had has abandoned him in office, and in this case the failure is all but inexplicable.

Well he just proposed eliminating all deductions and credits didn’t he? That should make it simple. The new 1040 Obama will be very easy. Basically you list every asset you own and as long as it isn’t above a certain amount you can keep it.

Really? It’s not funny when you consider the motives behind each person’s actions, though, is it? At least not for me. Let’s see: Paul Ryan is trying to salvage the United States economy so that we can continue to exist, whereas Barack Obama is trying to implode the United States economy so that he and the rest of the liberal, socialist elites can rebuild it to their more enlightened specs. Yeah, just not seeing any similarity at all.

Deductions do distort the economy. I would bet that most conservatives would support doing away with all deductions in exchange for a simple flat tax that spreads the legitimate burden of running the federal government across the wide spectrum of taxpayers.

If conservatives oppose Comrade Zero’s proposal to eliminate deductions, it isn’t hyprocrisy. Rather, it’s because they see it for what it is — a big tax hike disguised as “simplification.”

Tell me, hicsuget, did Obama fool you into thinking his tax increase was just simplification???

I did. Tell me when you get to 20 million and we might be approaching an average. The numbers listed are not simply the amount of time needed to write the information into the form. It counts the time needed to gather the needed information. It also counts the time needed to read and understand the instructions. It isn’t meant to show using tax software.

Tell me, hicsuget, did Obama fool you into thinking his tax increase was just simplification???

Cicero43 on April 15, 2011 at 1:17 PM

Of course not! Most of Obama’s policies so far have complicated the tax code (all the deductions for “green” initiatives, for instance). I’m certainly no fan of the guy.

What bothers me, though, is how conservatives attack him even when he’s advocating conservative policies. (See also the Republican outrage over Obama’s proposed cuts to Medicare as part of the Obamacare fiasco.) You’re not pro-America, you’re anti-Obama, and there is sometimes a difference between the two.

It counts the time needed to gather the needed information. It also counts the time needed to read and understand the instructions. It isn’t meant to show using tax software.

Rocks on April 15, 2011 at 1:26 PM

Like MNHawk, it never took me more than 3 or 4 hours when I did it manually. Gathering the info isn’t any big deal, if you have any organizing skills, at all. Make up some envelopes. Throughout the year, as you buy/spend money on things that relate to your taxes, throw the receipts into the corresponding envelope. When you do your taxes, pull them out, enter the info. Done.

You want to eliminate deductions, fine. Get rid of that earned income credit, too.

reaganaut on April 15, 2011 at 1:25 PM

I agree with you that the EITC should be eliminated. However…

The purpose of the EITC was welfare reform. (Ford created it, and Reagan and both Bushes expanded it, for a reason.) Here’s a simple example with made-up numbers. Suppose you’re on welfare at $10k / yr. You could get a part-time minimum wage job at $7k / yr, but then you’d lose the $10k in welfare benefits, so your job would in effect pay you negative $3k, and you’d be better off as a welfare queen than working.

By phasing out welfare benefits gradually instead of all at once (in our example, let’s say you lose $0.50 in benefit for every $1 you make up to $20k), your part-time job would only displace $3500 in welfare, so you’d end up with $7k wages + $6500 EITC = $13,500; thus your job would in effect pay $3500, and you’re better off working + collecting government money than simply collecting government money.

The EITC is smarter and less harmful than regular welfare. That is not to say that it is smart, or that it is not harmful, but it is better than the alternative.

I did. Tell me when you get to 20 million and we might be approaching an average. The numbers listed are not simply the amount of time needed to write the information into the form. It counts the time needed to gather the needed information. It also counts the time needed to read and understand the instructions. It isn’t meant to show using tax software.

Rocks on April 15, 2011 at 1:26 PM

Here’s what you need to complete the 1040EZ form.

1. W2 forms
2. Social security numbers of your dependents
3. A pen

It does not take 7 hours to get this info and read a couple of pages worth of instructions.

If you can’t understand instructions like

Enter the number from your W2, Box 1 on line 10,

then you have bigger issues than the time it takes to fill out your tax forms.

Did GE pay U.S. income taxes in 2010? Yes, it paid estimated taxes for 2010 and made payments for previous years. Think of it as your having paid withholding taxes on your salary in 2010 and sending the IRS a check on April 15, 2010, covering your balance owed for 2009.

Will GE ultimately pay U.S. income taxes for 2010? After much to-ing and fro-ing — the company says it hasn’t completed its 2010 tax return — GE now says that it will.

In response to questions from Dow Jones Newswires, GE said the U.S. portion of the payments it was referring to included “overpayments applied to the 2010 return from prior years,” as well as “cash tax payments.

Flat taxes would be far simpler to manage for both sides of the equation. Certainly the IRS could reduce their workforce and only need to hire employees whose skill set included picking “which number is bigger” and matching it with the adjacent line on their tables. Tax payers would know at any given moment what their tax burden would be, therefore know what their household budget should look like at any given time.

And corporations would save billions on accountancy, freeing up resources for growth, R&D, etc. I’ve played with the flat tax idea for many years and tried to shred it but can’t find a downside.

A lot of people are idiots. I have never understood why someone will pay HRB or JH $35 or $40 when all they have is one or maybe two W-2s. Even doing it by hand, that should take 5 minutes, maybe. But most of these people seem also incapable of adding two and two and getting four.

If you have more than just W-2s, the only real trick is to actually put your paperwork away when you get it in a designated file folder or drawer, so come tax prep time, all you have to do is open the file.

We just bought a house, so next year I’ll have itemizing to do. I expect the whole process to take me less than an hour, for state and fed taxes.

Right now the worst part of tax season for us is trying to get MyPay.gov to accept our password and let us print my husband’s 1099 for his retired military pay. That takes longer than everything else combined.

“When I’m president,” he said, “we’ll put in place a system where 40 million Americans . .. can do their taxes in less than five minutes.”

Obama’s idea was to have the IRS fill out the 1040EZ for filers. The IRS would basically send you a bill or a check — and if you disagreed with what they came up with you would then have to . . . tangle with the IRS.

It does not take 7 hours to get this info and read a couple of pages worth of instructions.

If you can’t understand instructions like

Enter the number from your W2, Box 1 on line 10,

then you have bigger issues than the time it takes to fill out your tax forms.

angryed on April 15, 2011 at 1:46 PM

Do you have any concept of the idea of what an average is? It’s not based on what you do. Part of filing out a form is determine what form to use in the first place. Once there you have the instructions and worksheets for things like the EITC, etc. Not everyone’s taxes are easy or cut and dry. Some are very complicated even for the 1040EZ and then you allow for the average intelligence not that of the highly motivated and organized person. You have to include the people with “bigger issues” in the average too.

Only if you’re retarded. It only took me an hour to do my regular 1040 using Turbo Tax Online. Granted, it’s costing me almost $80 for the Fed and State but I could do it by hand in almost the same amount of time.

Here’s your 5-minute IRS Form 1040. Of course, it’s just the summary sheet from the 4-page long income tax form for 1913, the first year for U.S. income taxes under the 16th amendment, but you didn’t specify which version of the Form 1040 you were really after!….

I have two businesses and just bought a house. I set aside a full day for taxes and it usually takes me about five hours using TurboTax – including the state form. Mine tend to be more complex than most.

If it only takes me five hours to do with a whole bunch of additional forms, there should be no way on God’s green earth that the AVERAGE 1040EZ filer takes seven hours…

The thing about eliminating deductions is you eliminate them all, and reduce the federal tax rates. They tried this under Reagan (any of you older folks remember Reagan’s peeps stacking tax code book after tax code book on a table till the table collapsed?), and had the whole thing down to rates around and under 10%, then someone said “hey, what about the mortgage interest deduction on a persons first house?” and we ended back with the crazy code we have.

Excellent book, if dated, is Showdown at Gucci Gulf, about the attempt to reform and simplify the tax code.

Without the ability to add this break and that break, the power of individual Congress critters would be vastly reduced.